Venezuela reopens
Venezuela's oil industry is reopening to Western companies. Following Maduro's removal in January 2026 and the easing of US oil licenses, the country's degraded fields need years of drilling, equipment and oilfield services to restore output. As production returns, Venezuelan heavy crude flows back to US Gulf Coast refineries that were built to process it and have been running on costlier substitutes since sanctions cut the supply. A portfolio under this thesis selects two kinds of companies. The first are oilfield-service and equipment providers with signed, paid contracts for Venezuelan work, so that the exposure rests on awarded business rather than on expected tenders. The second are US refiners configured for heavy crude, which buy Venezuelan barrels at a discount to lighter grades. Heavy-oil producers elsewhere, which compete for the same refinery demand and lose pricing power as Venezuelan supply returns, are excluded.
Marathon Petroleum is a pure downstream refiner with no upstream production — 13 US refineries, 2,986 mbpcd, plus a 64% stake in the MPLX midstream MLP and a small renewable diesel segment. the thesis leg here is Gulf Coast heavy-crude capacity: the Gulf Coast region is 1,248 mbpcd (about 42% of capacity), anchored by Galveston Bay (631 mbpcd) and Garyville (617 mbpcd), both complex coking plants that ran a 58% sour slate in Q2 2026. management bought two Venezuelan Merey cargoes in late January 2026, said both Gulf Coast plants can run Venezuelan crude and that it is leaning into a heavier, more sour slate. refining is the dominant earner (R&M adjusted EBITDA $6.7bn vs midstream $1.8bn in Q2 2026). the business is squarely a Gulf Coast heavy refiner, but under half of capacity sits on the Gulf Coast and midstream is a non-thesis fifth of EBITDA → material exposure, 0.6.
Phillips 66 is a non-integrated refiner with no upstream, so it is on the right side of the feedstock trade, but it is the most diversified of the large US independents: midstream (pipelines, NGL fractionation, gathering and processing) was the largest pre-tax earner in Q3 2025, with chemicals (CPChem) and marketing and specialties alongside refining. within refining, the Gulf Coast region — Sweeny (265 MBD) and Lake Charles (264 MBD), both with delayed cokers — is 529 MBD of 1,948 MBD net crude capacity, about 27%; the rest sits in the Central Corridor, Bayway, Humber and Ferndale. management says the system can take up to 250,000 b/d of Venezuelan crude and was already buying US-administered cargoes in february 2026 with no capital required. the thesis lever is real and already operating, but Gulf Coast heavy refining is roughly a tenth to a sixth of group earnings power → 0.5, the floor for this portfolio.
Valero is a pure independent refiner with no upstream production — 15 refineries, 3.2 mmbpd throughput capacity, plus smaller ethanol and renewable diesel segments. the 10-K refinery table puts about 1.9 mmbpd (roughly 59% of capacity) at Gulf Coast plants: Port Arthur (435 kbpd, heavy sour), St. Charles (340, sour), Corpus Christi (370, sour/sweet), Texas City (260), Meraux (135), Houston and Three Rivers (sweet). the heavy-sour-configured Gulf Coast plants are roughly 40-45% of system capacity. Valero was among the first Gulf Coast refiners to buy Venezuelan cargoes after the january 2026 license easing and planned up to 6.5 mmbbl in march (~210 kbpd, ~7% of throughput); it ran ~240 kbpd of Venezuelan heavy before 2019 sanctions. this is the archetype of the portfolio angle, but sweet-crude plants, California/Canada/UK refineries and the ethanol and DGD segments dilute it, so 0.7 rather than 1.0.
PBF Energy is a pure independent refiner — six refineries, roughly 1,023 kbpd of capacity, no upstream production to net against lower crude prices. the thesis lever runs through one plant: Chalmette, Louisiana, 185 kbpd, a dual-train coking refinery with a 42 kbpd delayed coker on the Gulf Coast that was built to run Venezuelan crude and came with a PDVSA supply contract at acquisition. Chalmette is about 18% of system capacity, and the FY2025 10-K notes it has recently run a mostly light and medium slate. Delaware City (fluid coker, waterborne heavy sour) can also take Venezuelan cargoes but sits on the East Coast, outside this angle. management told the Q4 2025 call that Venezuelan supply is a tailwind and the system can run up to 60% heavy sour, and the company lobbied on Venezuela in 2025. material but minority Gulf Coast heavy exposure inside a pure refiner → 0.5.